Business
Detention Center Finds Its Way Out of Bankruptcy
The plan is a pipeline. It runs from the neighborhood to the intake door, and it is already mostly built.
A detention center in Central Falls that filed for bankruptcy in July has found its way out, according to people familiar with the plan, which is a pipeline.
The pipeline will run from the neighborhood to the intake door. Engineers describe the route as short. Most of it, they said, is already built, and has been carrying traffic for years without a name.
The facility's trouble was never the building. It was the beds. The center borrowed $106 million on bonds in 2005 and has been in default on them for more than ten years. It is paid by the head, so its debt is paid by the head, and it has 782 beds and has averaged about 675 heads. Every empty bed is a missed payment. A bankruptcy filing is what that arithmetic looks like when it is written down.
The reorganization plan asks bondholders to forgive more than $100 million. The pipeline is meant to make sure the next set of bonds does not have to ask. A spokesperson for the project said the goal is predictable flow. Asked flow of what, the spokesperson said occupancy.
There is a snag. The center holds federal detainees, for the U.S. Marshals and for immigration enforcement, and not the people a neighborhood produces on an ordinary Tuesday. The engineers said this was a matter for the far end of the pipe. The near end, they said, has never had trouble producing.
The city receives $400,000 in the first year under the plan and $250,000 a year after that. The residents at the near end of the pipeline receive the pipeline.
Construction is described as ongoing, and as having begun some time ago.